Institute of Practitioners in Advertising’s quarterly Bellwether survey shows budgets fell in 2012, but offers hope for 2014

Downbeat marketers reduced their advertising budgets for a fifth year in a row in 2012, with continuing concerns about the strength of the UK economy leading to a forecast of a fall in ad spend this year.

Despite advertising-friendly events such as Euro 2012 and the feelgood factor of the London Olympics, a greater proportion of companies slashed their ad budgets last year than in 2011.

However, the Institute of Practitioners in Advertising’s quarterly Bellwether survey, which gauges the outlook of the UK marketing industry, found some cause for cheer in the first quarter this year, with marketers more confident than they were at the close of 2012.

While there was only a fractional increase in advertising budgets in the first quarter, marketing executives grew increasingly optimistic about their own company’s financial prospects with confidence at a 12-month high.

However, marketers are taking things cautiously – Bellwether is conservatively forecasting the advertising market to contract by 0.3% this year – as pessimism about the prospects for the UK ad industry continues to persist.

“While there is continued concern about the economic outlook, things do seem to be holding up,” said Paul Bainsfair, director general of the IPA.

The prospect of an advertising boom in 2014, fuelled by the World Cup in Brazil, has led the IPA to forecast ad growth of 2.3%.

The IPA’s growth forecasts are far more pessimistic than those of Warc, the marketing intelligence service, which were also released on Thursday. Warc estimates the UK will grow by 3.1% next year, although this is a downgrade of almost one percentage point from its November report.

“While the Bellwether is suggesting the economy is recovering, it looks set to be another challenging year for businesses and the pace of economic expansion is likely to be modest,” said Chris Williamson, chief economist at Markit which compiles and authors the report for the IPA.”

• To contact the MediaGuardian news desk email media@guardian.co.uk or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. If you are writing a comment for publication, please mark clearly “for publication”.

• To get the latest media news to your desktop or mobile, follow MediaGuardian on Twitter and Facebook.